Let’s set aside the obvious complaint about state lotteries. Obviously the state has no business being in the lottery/gaming business, but that won’t get us anywhere here. Instead, this article raises an interesting question about a scratch-off game in progress. Specifically, this:
State lotteries are coming under renewed criticism for selling scratch-off tickets after the top prizes have been given away. The latest challenge comes from a professor who says he intends to sue Virginia for allegedly selling $20 million a year in lottery tickets that had no top prize available.
About half of the 42 states that have lotteries — including Florida, New Jersey, Michigan and Tennessee — keep selling tickets after the top prizes are gone. The states say the practice is fair because lottery tickets and websites disclose the practice. Also, other prizes are available.
…In August 2007, Washington and Lee University business professor Scott Hoover bought $5 tickets for a game called “Beginners Luck” in Virginia. Later, he learned the top prize was awarded in July. Using public records, Hoover calculated that the state sold about $20 million annually for three years in tickets when a top prize wasn’t available. He says the state should compensate these players.
Reflexively I side with the state’s position in this case as long as the practice is disclosed. If, in the example above, Virginia advertised the game on television, radio, and in print with the lure of the top prize after it had been awarded, that’s a problem. But if the rules of the game explain – even in the fine print – that the game will continue until all prizes are awarded (or all tickets are sold), there is no fraud. What’s the issue?
Then there’s the odds. The player is playing a game in which the odds the player will win the top prize are absurd from the game’s inception. Yes, the odds become zero after the top prize is awarded, but surely the player intends to win something if he doesn’t win the big prize. Most lottery players I know habitually use their winnings to purchase more lottery tickets. It becomes (hopefully) a financially self-sustaining habit. So, if the state should compensate players for buying tickets after someone won the top prize, will those players be required to return any winnings?
Or I could be totally wrong and the state’s engaging in shady practice. I seem to be in the minority in thinking the state shouldn’t be in the gaming business, to say nothing of imposing a monopoly. Maybe I’m also being a silly here in thinking the contract is the contract.
Note: Beginner’s Luck on the Virginia Lottery site clearly states that zero top prizes remain.